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Strategies & Market Trends : Dino's Bar & Grill -- Ignore unavailable to you. Want to Upgrade?

To: Goose94 who wrote (77017)	2/12/2020 8:09:10 PM
From: Goose94	Read Replies (1) \| Respond to of 203230

Crude Oil: The market remains gripped with panic from the coronavirus outbreak, resulting in the price of oil falling by over 15 per cent due to worries about very short-term demand disruption. This issue is transient and it too shall pass. The oil market stands on the cusp of a multi-year bull market driven by a number of factors: 1)U.S. shale growth rates are sharply decelerating. We are looking for 700,000 barrels per day (bbl/d) of growth in 2020, down from a peak run rate of 1.8 million bbl/d. A recent survey of over 24 shale executives called for under 400,000 bbl/d of growth in 2021. 2)Global offshore production (about one out of four barrels produced globally) is entering into a multi-year decline due to insufficient investment over the past five years. 3)There’s insufficient OPEC spare capacity to meet the “call on OPEC” over the next five years. We believe that once the panic and hysteria fade, oil can rally back to $60 in the second half of 2020. The recent plunge in energy stocks (especially in the midcaps) will be seen as a gift. The most attractive energy investment opportunities anywhere in the world are in Canada: Valuations are the lowest (some stocks trade at 2.5 times enterprise value to cash flow (EV/CF)with a 20 per cent free cash flow yields), sentiment remains terrible and yet the country is quickly building out incremental takeaway capacity and oil differentials are continuing to fall. Medium-term fundamentals (2022 to 2024) call for an oil price much higher than $60, yet at that level, we’re deploying fresh capital in names in which we believe can more than double in value. Never waste a good crisis. Eric Nuttall on BNN.ca Market Call Wed Feb 12th @ 1200ET